Mission: Accomplished?

The power struggle for Ukrainian steelmaker Ilyich iron & Steel looks like it has been decided.

Last week,Metinvest said it would take a majority stake in the company to form one of the world’s largest producers. The partnership will eventually create a 20 million tpy steelmaker, Metinvest says.

After the deal, Ilyich will retain a 25% share in its own assets and some of Metinvest’s under the leadership of chairman Vladimir Boyko.

The merger was made possible when the Ilyich board voted to increase the number of Ilyich shares in circulation by a factor of four, thus diluting the stake controlled by a group of companies Boyko had dubbed ‘corporate raiders’.

Alkom, Depositary Bureau and Kastodian all claimed a share in holding company Ilyich Stal on June 30 last year. Analysts believe they are holding companies for four former shareholders, all based at the same address in Cyprus.

It is still unclear who is behind these companies. But ever since Metinvest said it would buy the newly issued shares in Ilyich, it has become less important.

The combination will be massive. Had the partnership existed in 2009 and produced 20 million tonnes it would have been the world’s 12th largest steelmaker, ahead of names like Severstal, US Steel and Gerdau.

Metinvest, controlled by billionaire industrialist Rinat Akhmetov, will also invest $2 billion in Ilyich’s facilities, which includes twelve sintering machines, five blast furnaces, three oxygen converters and an open hearth furnace.

A pretty impressive steel company is being created.